US Bullion: From Colonial Coinage to Today

From the early Continentals to the modern-day American Eagles, American mintage has traveled a long road. Bullion Exchanges takes you through a brief tour of American bullion history.

Colonial Bullion

The right for America to issue its own coinage was a huge and exciting step in becoming an independent, sovereign nation. The United States first executed this right with its Pattern Coins, issued in 1792. Gold coins wouldn’t be released for a few years yet, first appearing in 1795. “Colonial coin” is the term given to the coins that were used before the official coin issues, when business was completed with a variety of tokens, coins, and assorted medals - a variety of items which were created by private mints, individuals, and even mints outside of the new country.

The Coinage Act was passed in 1792, setting the foundation for the U.S. Mint which would begin producing silver dollars and gold coins in 1794. Silver dollar owners and collectors are part of a tradition of American mintage that dates right back to the grassroots of the nation itself. (If you aren’t a silver dollar collector yet, take a look at some of our most popular coins available for purchase here).

The founding fathers wanted a currency which was convenient but precious metals based. For this reason, they started out with paper currency which could be redeemed for gold and silver. They recognized the impracticality of Americans walking around with pockets full of gold but hoped the banks would facilitate transactions so that paper notes could be used, their worth stemming entirely from their conversion to gold or silver.

Pre-1933

The system of being able to exchange paper money for precious metals became a problem during the Civil War because these notes were managed by private banks spread out across the country. Therefore, there was no standardized issue and banks created their own bills because no laws had been set up to stop them from issuing notes that far outnumbered the precious metals they were in possession of. Furthermore, counterfeiting was entirely too easy. These issues combined with the stress put on Congress by the Civil War led Congress to issue a fiat currency, and in 1863, to organize a system of banks that were still privately owned, but now chartered by the government.

Now, notes issued by these banks were backed by government bonds, and paper took over as the country’s primary form of currency. In 1913, the Federal Reserve was born, and began to issue its notes and encouraged the trade-in of gold for them.

This period of having the ability to exchange paper notes for gold and silver came to a close in 1933. That year, President Franklin Roosevelt ordered the collection of all gold coins, bullion, and certificates to Federal Reserve banks. Those who did not comply would face the punishment of confiscation and other federal charges. Between 1933 and 1968, the government took a series of actions transitioning further from precious metal use in currency, including issuing changes to the intrinsic value of coins like dimes and quarters called “sandwich” coins. It wasn’t until 1973 that the U.S. dollar was sent out on its own officially, nothing backing it aside from its designation as legal tender by the U.S. government.

1986 to Today

1986 is the year we received the first release of the official gold bullion coin of the United States: the American Eagle series. Deriving its value not from its face value, but intrinsically, this series has grown exponentially since that critical first release, and today collectors around the world covet this incredible piece of U.S. bullion.

A typical day at the U.S. Mint now sees the production of 30 million coins. The mint has four facilities spread across the country: Philadelphia, Denver, San Francisco, and West Point. Many releases out of these will tout the specific facility’s mintmark, adding a bonus demand element. The Philadelphia facility is actually the largest mint in the world. The Philadelphia and Denver facilities are responsible for producing up to 28 billion coins annually.

From a manual minting process that involved horses and a furnace to today’s automated and highly sophisticated production process, U.S. bullion has traveled far and is sure to continue this journey. Who can predict what kind of sophisticated process will be used decades from now, or which coin in your current collection may turn out to be worth much more than what you originally bought it for in the future. There’s a reason that coin collecting is one of the oldest hobbies in the world and has been called the Hobby of Kings!